In message , Fred writes
Sounds like a stitch up. As you suggested earlier, the company wanted you out of the scheme so got the IFA to do the dirty work.
Hmm, what to do next..
1) Although you say you are out of pocket by £100k, how have you quantified that?2) Have you tried the Financial Ombudsman?
Finally, try and leave some of the post to which you are replying in your post, it makes it easier for us all to follow.
1 It would cost around £100,000 plus the £135,000 to £140,000 in my present fund to get me back to where I was. This is a big estimate not exact. It could be more but not much less. 2 I had a lot of correspondence with the Financial Ombudsman who sided with the FA. His word against mine, but the fact that his partnership went into liquidation (
You've obviously had a bad experience and this has made you bitter - which is a pity. But as John has said, an advisor can only call himself an I fa if he offers to be remunerated by fees. If you choose the fee option then the "biggest bung" goes to you - the fee remains the same. If the IFA doesn't offer a fee option then he cannot call himself Independent - just and FA.
I suggest your judgment is coloured which makes it difficult to be dispassionate. By no means all IFAs are as you suggest.
Rob Graham
The amount of miss-selling that went on demonstrated that some 50% are downright crooks. Another complaint of mine is that you are forced by the Inland Revenue to reveal all that you own to these possible crooks.
No, not so. Firstly, it's nothing to do with the Inland Revenue. However, the regulator (the FSA) does require that advice is only given after the advisor has sufficient information to give informed advice. You wouldn't want it otherwise, would you?
But he doesn't need to know things that are not relevant to the issue. Or you can decline to tell him and he'll then give you advice based on limited knowledge - which might be dangerous.
Rob
Eh? They want to know what house I have, what car etc?
MM
No, not so. Firstly, it's nothing to do with the Inland Revenue. However, the regulator (the FSA) does require that advice is only given after the advisor has sufficient information to give informed advice. You wouldn't want it otherwise, would you?
But he doesn't need to know things that are not relevant to the issue. Or you can decline to tell him and he'll then give you advice based on limited knowledge - which might be dangerous.
Retirement: "This is the age at which the scheme expects most employees to retire and begin drawing the pension (these arrangemnts must comply with Inland Revenue rules)." from agepositive.gov.uk
On the form I filled there space for (apart from all the other assets); How do yau have in the Bank, Building Society, ISA, PEPs etc etc etc.
Eh? They want to know what house I have, what car etc?
Yep - the value of your house and any outstanding mortgage. The common car is not normally an asset. Vintage cars yes.
In message , Fred writes
I think you misunderstand., The Inland Revenue (now HMR&C) lay down the rules to which the pension must comply. But it is the FSA that make the adviser ask the questions about you.
It seems to me that you are deliberately trying to work under a misconception. You aren't forced to tell anyone anything. But if you don't give enough information for informed advice then you've only yourself to blame.
Rob
Over time, I've noticed loads of IFA bashing posts within this newsgroup.
I've got no strong feelings either way as to whether people use IFA's or not - certain regular posters to this group have enough insight and knowledge to get along quite well without using an IFA, and that's fair enough.
However, as many people have little conception at all about financial issues and products (if you had asked me 10 years ago what a Term Assurance policy was, my eyes would have glazed over) and in such situations, getting financial advice is usually of some benefit to them.
While many here see any charge or fee taken by an IFA as a complete rip-off, the flip side is how on earth do you expect them to make a living ?
Would you expect your accountant to work for nothing ? The next time you see a lawyer, tell them that you don't want to pay them a fee.....See how far you get.
I do agree that there are still a HELL of a lot of IFA's out there (often those who have been around for a long time) who only seem to be interested in working on a commission basis. I often speak to people who inform me that "My IFA doesn't charge me anything. The insurance companies pay him commissions." The fact that they don't even realise that this is coming out of their monthly premiums is something I quickly put them straight about. In general, this type of advisor generally understands tax and product rules surrounding particular contracts, but often their investment skills leave a bit to be desired. It is probably also this type of advisor responsible for the sale of the majority of investment bonds, when in many cases these are completely inappropriate (especially for basic rate taxpayers, or those with unused CGT Thesholds)
I've met plenty of these type of guys, but also lots who are a million miles removed, and are involved in genuine financial planning - note the word 'planning', not just 'advice'.
A good financial planner will take all your circumstances into account and come up with a plan - even if the advice boils down to recommending that you pay off all your credit card debts before even considering buying any investment products - of course they will charge you a fee for their work, but is this not preferable to the commission hungry advisor who will make a recommendation solely out of the need to generate some commission ?
Hopefully, the role of the 'financial planner' will become the norm, and the commission hungry salesmen who can't adapt can slide off into the interzone of double-glazing territory...
Rgds Neil.
Rob graham wrote:
The root problem is that we have a Government run in the main by lawyers. People who can think go in to Science and Engineering. The lawyers try to govern the country with laws. So the resultant mess has to be sorted out by even more Lawyers, Taxation experts, Financial Advisors, Ombudsmen and so on and so on.
The Pension you get is the proceeds of what you have saved for your old age. There is one simple rule and that is - spread your assets.
Getting tax relief on your contributions is a con. First you may not live long enough to use it. If you do live long enough you still may die in a couple of years. When you draw it you pay tax on it - the tax you never paid in the first place!
Pensions are not complicated, it is the mess of laws and greed that has screwed up the whole system.
Hear, hear!
No, hang on. Would you rather not have the tax relief?
First you may not
That can apply to anything. But it doesn't make that thing bad.
If you do live long enough you still may
Generally you get a tax free lump sum of some sort. Is that not worth having?
True, but one thing (the only thing, as far as I can see) that this government has done is to try to iron out the whole system of pensions - called simplification. Once it settles down, all schemes will come under the same rules. Can't be a bad thing.
Rob Graham
That's the best bit of writing so far on this thread. I'm pissed off with the bigoted rantings of those who have suffered under the hands of an unscrupulous IFA. I'm very sorry for them but painting all IFAs black because a few actually are is counterproductive. The best thing is to try to eliminate the cowboys so that the good ones can flourish and be useful. Bigotry gets you nowhere.
Rob Graham
I've just re-read this thread, and the first post states:
I wonder who quoted figures of 5.09% commission ?
This equates to over £7,000 in commission. Now given that this would be a single transfer from one provider to another, and given that a standard hourly rate charged by an IFA is c. £150, this equates to the equivalent of 47 hours of work. Err...,, I somehow doubt it.....
I guesstimate it would take about one third to one half of this time, and any fee / commission should be charged accordingly.
Are these the generic commission figures quoted from insurance company literature, or has an advisor actually quoted these figures ? I would say 2% commission is more appropriate in the majority of income drawdown cases. (unless they are really complex).
Neil.
Rob graham wrote:
In message , snipped-for-privacy@invidion.co.uk writes
Neither, it is the figure put on he bloody awful menu that the FSA insists is handed out but which bears no resemblance to what actually happens. Only the customer specific illustration shows the true figure whichw ill be more in line with what you describe.
The annoying thing is that you could input those figures into the FSA calculator and it will come out along the lines as the OP.
The FSA encourages IPA's to give misleading information?
Fred Baker
In message , Fred writes
Yes, as did the PIA, Lautro, FIMBRA, etc.,
I may be wrong here, but I thought that the menus had to show the 'maximum' commisson that the IFA would be prepared to take.
Therefore, if the menu given by an IFA firm states that 5.09% is the maximum, then in some cases they will take this.
If the figure is more in the line of 2 - 3%, then this should be the maximum figure.
Is this the correct interpretation ?
Neil.
John Boyle wrote:
To clarify this matter, this IFA in question states:
Product- Income Drawdown
Commission 4.5% of the amount you invest plus 0.5% of your fund value from year 2
Commission Market Average 5.09% of the amount you invest plus 0.75% of your fund value from year 2
So if that is supposed to be the Market Average, the highest could be ridiculous
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